The 2018 Forecast issue of Dronin' On 01.06.18

Hi all –

I hope you didn’t get caught in the TSA computer fail that slowed down so many travelers coming home. You can thank the Pilot in Chief for your safe landing – as you must know he congratulated himself on “being very strict on Commercial Aviation” – resulting in a perfect 2017 global safety record. Please don’t let the fact that 2010-11-12-13-14-15-16 were also perfect here in the US distract you from this extraordinary accomplishment. If you want more, Slate has the deets.

If you want the definitive treatise on 2017, I highly recommend Bard University’sDrone Year in Review: 2017 which covers both military and civilian applications. If you need to look forward, Dronin’ On is dedicated to connecting the dots that impact and influence the commercial UAS industry.

People started asking if I was planning a 2018 forecast a month ago. Honestly, I was on the fence until I got an email from Patrick Egan on New Year’s Eve. The subject line was “Am I seeing an awakening here?” The message was pure Patrick, “Is it me or are people starting to see they are getting screwed?” 

It inspired me because it is clear that our industry desperately needs fresh leadership to meet the challenges we face, starting with effective representation to the Congress and the FAA. Patrick’s point and mine is that our self-anointed leaders, most of whom are well-paid lobbyists representing a narrow range of interests, do not represent the increasingly diverse group of stakeholders who make up the industry. If you don’t want to read to the end, the message is simple.

A handful of people have made herculean efforts on our behalf through their work on the DAC and ICAO. Now each of us needs to participate by being in direct communication with our elected representatives at the local, state and
federal level.

As stakeholders in the UAS industry we can no longer afford to sit by and hope that someone else will do the right thing on our behalf.

If you want a ‘for instance’, read on – I have just the thing for you.

2018 FORECAST

CLUE #1 By what few metrics we have, the industry is growing.

  • There are 69,166 RPICs more than there were 16 months ago.
  • Registration will soon cross the one million mark after two years including a court ordered hiatus.

The use case has been made. According to a recent Pew Report, “8% of Americans say they own a drone, while more than half have seen one in operation” – a definite measure of market penetration. It’s an interesting study – fear is softening a little compared to previous studies.

CLUE #2 CES is next week (January 9-12 in Las Vegas.) For the past few years, it has been a drone fest with more love and incredibly valuable free PR than you can possibly shake a stick at. Well, guess what, the bloom may not be off the rose, but it is shriveling.

  • Last Wednesday, Verge published CES 2018: What to Expect From the Year’s Biggest Tech Show – there are seven topics and not one word about drones…
  • Same with Time, Gizmodo and TechRadar.
  • According to the CES website there are 50 exhibitors in the Drone Marketplace. Virtually all of them are Chinese companies – the FAA has two booths.
  • Intel CEO and DAC Chair Brian Krzanich has the night before Opening Day keynote. Even his bio is drone free. Given the news about the Meltdown and Spectre processor vulnerabilities, one can imagine that his team is scrambling to refine the speech. So much for the new oil.
  • Of course, everyone is wondering what DJI will announce.
  • Meanwhile TechCrunchreports that GoPro is laying off 200-300 employees from their aviation group.

Attention is shifting to 8K, AI, 5G, electric cars and other complementary
product categories. 

CLUE #3 A quick look around the world shows that regulators are increasingly concerned with risk and are putting ever more stringent rules in place.

Here in the US, our growth has hit a wall called Remote Identification that leaves us at a regulatory stand still.

  • Over Flight – stalled without Remote ID.
  • BVLOS – stalled without Remote ID and really UTM at scale.
  • UTM – on track to complete testing in 2019 but ID is a fundamental component.
  • CUAS – requires ID plus significant regulatory action to permit interdiction.
  • True autonomous operations – not even in the discussion phase. But some important principles are being hashed out viz automobiles.

All this adds up to a tough year for the sUAS industry as UAVs continue their slide into Gartner’s Trough of Disillusionment. Patience with the regulatory process is essential. Meanwhile winners are being chosen and the shakeout is underway.

CLUE #4 Of course, there are bright spots.

According to TechNodeThe Chinese Ministry of Industry and IT expects the sector to grow 40% each year by 2020 and 25% after that.” (see the CES exhibitor list)

CaixinGlobal.comreports that supported by various government initiatives “China wants its drone industry to take off to $27 billion in total output by 2025, as part of the “Made in China 2025” campaign to add more high-tech spice to country’s domestic manufacturing sector.”

The South China Morning Post trumpeted Advances in technology, combined with sensible and easily enforced regulations, set the stage for a boom in pilotless aircraft calling 2018 the Year of the Drone. (Actually, the Year of the Dog starts
in February.)

WeTalkUAVreports that Nanyang Technological University (NTU) in Singapore used nearly 600 drones to extensively test potential drone damage, according to The Straits Times. I hope the overflight people take a look at some of
their recommendations.

Closer to home, Josh Ziering, the Co-Founder & Chief Pilot of Kittyhawk.io which has some 35,000 active users took the time to drop me a line and say:

Last year, we saw a non-trivial number of teams effortlessly 10x in size as they moved forward with their drone programs. They were just the first wave, and they’re not even close to done growing. We expect to see even more teams growing exponentially this year. I’ve specifically chosen to call out 2018 as a big year
for growth.”

THE AMA AND THE 336 CARVE OUT

The Commercial Drone Alliance wrote a formal dissent to the Remote ID ARC report pointing out that the 336 carve out would exempt the majority of drones, (around 88% of all registered drones,) now and in the future, from any kind of electronic identification requirement.

I covered it in depth in the recent Dronin’ On Holiday issue which you are forgiven for not reading over the Christmas weekend, but you may want to catch up with now. Lisa Ellman’s point is that times have changed and hobbyists are no longer flying alone. There is a new commercial drone industry that’s flying in the same airspace… and it is very hard to know whos who.

I am hopeful that together we can influence the writing of the 2018 FAA Reauthorization to modify or remove the carve-out.

Believe it or not, the FAA has been struggling with the regulation of model aircraft since 1981 when it published Advisory Circular 91-57 “Model Aircraft Operating Standards” which was finally canceled in 2015, then revised and reissued in 2016 to bring it in line with current rules.

Aviation writer and historian Bill Carey tells the story well in Enter The Drones (pp. 72-73). According to Gary Michel, an FAA attorney he interviewed:

“The advisory circular basically said, “Use your head.” If you’re flying a model airplane, don’t do it above 400’ and don’t do it within X miles of an aerodrome… It was an attempt at a finesse to not go to a rulemaking, which in hindsight, is really what should have been done.”

In 2012, as part of the FAA Modernization and Reform Act, Section 336 was included to address model aircraft.

“Notwithstanding any other provision of law relating to the incorporation of unmanned aircraft systems into Federal Aviation Administration plans and policies, including this subtitle, the Administrator of the Federal Aviation Administration may not promulgate any rule or regulation regarding a model aircraft, or an aircraft being developed as a model aircraft . . .

(1) the aircraft is flown strictly for hobby or recreational use.

This was the language that the court referred to in Taylor v Huerta when it determined that the FAA did not have the authority to issue a rule requiring the registration of UAS used as “model aircraft” in May 2017. Registration was reinstated by President Trump as part of the Defense Appropriations bill in December 2017.

Here’s what the Academy of Model Aeronautics(AMA) wrote on their website:

As you know, AMA aggressively engaged with Congress to achieve the best possible result for our members. It is through these advocacy efforts that we were able to achieve our goal of maintaining the Special Rule for Model Aircraft and protecting our hobby.

To protect their meal ticket, and so the rest of us get screwed (I know you were waiting for me to pay that off,) the AMA continues to wage a highly deceptive
PR campaign.

This week AMA President Rich Hanson wrote an op-ed in The Hill Punish Rogue Recreational Drone Pilots — Not the Rule Followers. His argument is as follows:

“…According to the FAA, around 900,000 recreational users have registered their drones with the agency so far. The math from here is easy — about 200,000 people fly under Section 336 and the remaining 700,000 are required to operate under
Part 107.
 

Those that aren’t flying under Part 107 are in violation 14 CFR § 107.12, the requirement for a remote pilot certificate.

The truth is Section 336 is not to blame for rogue flyers. Those people are Part 107 violators — and should be treated as such.” 

There are (at least) three problems with his argument … If you go to the FAA Part 107 Fact Sheet, the very first sentence reads (emphasis mine):

“The new rules for non-hobbyist small unmanned aircraft (UAS) operations – Part 107 of the Federal Aviation Regulations (PDF) – cover a broad spectrum of commercial uses for drones weighing less than 55 pounds.”

I don’t have a degree in logic, but it is pretty clear that “all flyers who are not members of my association are commercial operators” is not a valid argument… Dude if you want to make the case don’t start by calling them “rogue recreational drone pilots”… Especially when the statute you are banking on says
recreational use.”

The real issue here is that you can register as a ‘modeler’ and fly under 336 rules without joining the AMA.

Second, given (as you will see in a minute) that the AMA does not police UAS registration as a condition of membership, it is pretty cheeky of them to claim 200,000 of the 943,535 registered pilots. Truth is, they don’t know.

And third, the FAA lists 106,739 of that number as commercial operators. (Never mind the 50% delta between that number and the number of RPICs.)

USN safety ace and Dronin’ On contributor Frank Mellott wrote in to comment on Hanson’s op-ed:

“The AMA’s logical inconsistency is the epitome of ‘Do as I say not as I do.’ Here’s AMA saying that FAA should go after violators, but it’s a matter of AMA policy NOT to ensure their members register as required by law. If AMA is so concerned about compliance, why aren’t they being a partner and HELPING the FAA rather than take a hands-off attitude?

Ouch, the truth hurts. Right there on their FAQ, the AMA does the dirty double dance “We encourage all members to follow Federal regulations, but we are not policing UAS registration.” 

Which I interpret to mean, as long as we get your membership fee, we don’t care whether you pay the FAA their five bucks or not.

Historians will remember that in 2015 the AMA urged their members not to comply with the new registration rule, arguing then as now that “Our members are not the problem and should not have to bear the burden of additional regulations.

Please encourage your legislators to help us make the industry grow by getting rid of the 336 carve out. As Frank wrote in 333, 107, Recreation & 101 – A Dangerous Regulatory Mess!, it is an essential step to rationalizing the rules. Even Rich admits that “Pilots following the rules are not the problem, but we acknowledge that some tweaks to Section 336 may be necessary.

CLUE #5 We will not have highways in the sky if the majority of UAS are not identified – or registered.

THE FAA

In their haste to add a cool trillion five to the national debt, everybody has been too busy winning to pay much attention to the mundane task of governing.

When you read this Saturday morning, there will not be an FAA Administrator. After five years of service, Michael Huerta has termed out. Thank you for your service Mr. Huerta and your willingness to be usher in a new era in aviation. Let’s hope our luck holds.

Like 100s of other appointed positions, no replacement has been named. Of course, the President’s tweet could presage an announcement…

To review, the next Administrator needs to be nominated by the President and confirmed by the Senate. He or she will manage a $16B+ budget and some 47,000 employees. Until an Administrator is confirmed, Daniel K. Elwell, who was appointed by the President last summer, will serve as the Acting Administrator.

But here’s the thing. In March, the FAA will once again run out of money. No worries, it’s like the 26th time that has happened in this century. There are two issues that are sticking points in the current draft of the Reauthorization bill; a regional airline pilot training requirement in the Senate, and the House push for Air Traffic Control (ATC) privatization – which has very little traction in the Senate. Adding some interest, privatization proponent Rep. Bill Shuster (R-PA) has announced he will not run for re-election, adding that he intends to focus
on infrastructure.

However it plays out, the Congress has gone from being impatient with the pace of sUAS integration into the NAS; to being increasingly concerned about the impact of sUAS on aviation safety and physical (infrastructure) security.

Whether we end up with a Reauthorization or an Extension, it is well within the realm of possibility that Congress will take the opportunity to mandate stricter requirements for Remote Identification. (This is definitely careful what you wish for territory.)

Here’s the other piece. Remote Identification and registration are like peas
and carrots.

The recent Black Hawk helicopter drone strike incident over New York was noteworthy because the National Transportation Safety Board (NTSB) was able to trace the operator from a serial number on a part recovered from the helicopter.

It’s cool CSI stuff, but I bring it up because the NTSB needed the DJI database to do this. All that the FAA registration database can provide is a list of unverified names by zip code.

So, can we please forget this narrative about privacy – someone somewhere needs to have this information about the millions of drones now in country, and the millions more that are coming. Right now it is a foreign company – that may not pass muster with the Congress much longer.

An interesting collision on the timeline could be with UASIPP/DIPP – the Integration Pilot Program. Despite the breakneck pace to get lead applicants to sign up for the trials, the FAA now has until May 7th to select and sign MOA’s with at least five lucky winners.

BTW I wrote the FAA asking them for the total number of Lead Applicants (as previously noted, they are not allowed to release the names.) So far, they have not replied to me, however the ever wily reporters at Morning Transportation seem to have gotten the information. (emphasis mine.)

WILL YOUR HOMETOWN BE ONE OF THE CHOSEN FEW? Thursday was the second deadline for governments interested in participating in the administration’s drone pilot program. The 320 local and state entities that submitted declarations of intent to apply in November had until Thursday to submit a six-volume application, which will be reviewed by the FAA with a focus on safety, feasibility and diversity of the operations proposed. According to a source with knowledge of the process, DOT and the White House will review the FAA recommendations through the lens of the question, “What does this application enable drone operators to do that they can’t do today?

320 is a big jump from the last unofficial report of 200 I ran December 9, so
who knows.

I am very interested to see what new things the FAA allows that “they can’t do today” without remote identification.

The City of Palo Alto is taking no chances – they have already put out a press release expressing their interest in two concepts – I expect there to be a lot more announcements as the Lead Applicants and their Interested Party partners figure out that they are going to have to campaign aggressively to be considered for one of the five mandated slots.

Add to that the President’s previous statement that the FAA should be run by a pilot, and you could end up with ALPA, AOPA and other manned pilot organizations having a profound influence on UAS regulation. Which is pretty much where all this started back when.

EYE CANDY TAG AWARD WINNERS

I am always inspired when I look at the images that people create with
their drones.

Here are the 2017 winners of the Dronestagram International Drone Photography Contest. I encourage you to poke around under the three main category headings – there is some very cool stuff from all over the world.

Thanks for reading and for sharing. Back issues of Dronin’ On can be found here.

best,
ck

Christopher Korody
DroneBusiness.center
chris@dronebusiness.center
follow me @dronewriter